The Holidays Bring an Influx of New Shoppers, but Here's the Catch

The holiday shopping season covers two of the biggest months for online retailers, with droves of new customers buying gifts for their nearest and dearest. Stores see the number of customers making a first time purchase increase during the festive season - 16% more customers are first time shoppers during the holidays.

Revenue spike from this influx of holiday spending, with November and December accounting for 23% of online retailers' total annual sales last year. But what is the relationship like with these new customers once the holiday spirit is gone?

Overall, the Customer Lifetime Value (CLV) of customers acquired during November and December is 15% lower than the lifetime value of customers acquired during January through October. Holiday customers are more likely to be “one and done,” driven by seasonal promotions and deals, with lower likelihood of making repeat purchases. This behavior drives this 15% decline in CLV for these newly acquired shoppers.

So, as marketers deploy marketing campaigns to maximize the holiday revenue bump and acquire as many new shoppers as possible, they should be prepared with a follow-up retention strategy to educate newly-acquired customers, encourage repeat purchases, and nurture a deeper brand relationship.

This is a finding from our recent Holiday Edition, E-Commerce Snapshot. The report is based on data spanning 30 million unique customers and $2 billion in revenue across 14 e-commerce verticals.

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Custora’s Take and How We Can Help

Custora is a customer-centric marketing platform that helps e-commerce retail marketing teams acquire, retain, and segment their customers. Retailers are using Custora this holiday season to improve their customer acquisition and retention efforts by finding out which marketing channels bring in valuable customers, making changes to acquisition budget and programs, optimizing promotion performance and segmenting their customer base to provide a personalized holiday shopping experience across all channels.

Custora works with leading e-commerce innovators and established retailers such as LivingSocial, Etsy, Fab, and Bonobos. If you’re interested in learning more about Custora, you can request a demo here.

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